In an earlier blog, we talked about what it takes to rent out a property quickly. One of the most important elements is to set a rental price that is consistent with the market. Today, we are talking a little bit more about what you should charge for your rental in Cape Coral or Fort Myers.
I will often get calls from people who explain they are interested in buying a rental property, and they need help deciding what to buy and what to charge for rent. The thing I always stress is that what they like in a home is not nearly the same as what a rental property should look like. It’s easy to confuse the two. When you buy a house, you might be looking for certain amenities and upgrades. Renters are willing to pay for certain amenities, but there are also a lot of things they think would be nice, but are not worth paying extra to get. This is why you rarely see a 7-bedroom, 6-bath home on the ocean for rent. It’s not that these homes don’t exist; it’s just that a person buying this property would never come close to recovering the cost of their investment on a yearly lease. There just aren’t enough renters willing to pay what it would cost to keep that house earning money for the owner.
When it comes to rental properties, people are looking for a fenced back yard, a lot of square footage they can use and maybe an office or den. These things are more important. Renters might like granite counter tops, a swimming pool or a golf course view, but these are not details that renters will be willing to pay more rent for.
Most property managers realize you need to rent the property quickly. Price it to get rented right away. If you spend month after month with your property on the market because the price tag is too high, you have no rent coming in, and that’s a problem. For example, if you want to rent out a property in Cape Coral for $1,200 per month, it might take you a month to get that place rented. If you had started out at a price point of $1,100, that property would have been rented right away, and you’d have the same annual return on your investment. If that same $1,200 property takes two months to rent, you have lost $2,400 in rental income. That means you would have earned the same amount of money offering the property for $1,000 on day one. It’s very important to know your market and offer something renters are looking for.
We can perform a rental analysis on your property here at Realty Services Property Management, which you might find useful if you are trying to figure out how to price your rental property. If you have any other questions, please do not hesitate to contact us at Realty Services.